How Low Can You Go?

How Low Can You Go?

.

Meanwhile…at the Mosman coalface…

Last week we experienced one of our quietest weeks in real estate but traditionally, the winter hibernation combined with school holidays does result in a lowering of activity.  Property supplies are at an all-time low but there is strength in the market place, as although the number of buyers is down, supply is the problem and buyers are outnumbering sellers.

One of the markets current strong points is apartments in the $500k to $900k range.  Last week we sold a 3 bedroom unit in Ellalong Road, Cremorne for $755k.  The apartment had a lovely north-east aspect and some views of Middle Harbour but it was in original condition and up 45 stairs.  In a proof of strength we had 15 buyers register to bid and the property sold for well over the reserve price.  Further good news is that all proceeds from the sale were donated to The Royal Flying Doctor Service.

We recently listed an apartment in Prince Albert Street that sold the first weekend it was on the market for close to $800k.

Other market sectors are not so strong, but it comes back to supply and demand in each price sector.  It remains a good time to buy as prices have fallen since 07, but stock levels are limited as Robert has pointed out in his recent reports.  Last week we sold one property in excess of $6m, have offers in the high $3m range on two others, and offers on properties in the low $3’s, $6m and one in the double digit territory.

So there is activity in the market place but the property has to be sensibly priced and in most cases, it is taking a little longer to find the right buyer.  There are a lot of people who want to trade but need to sell first.  This has been a problem for many as some agents are still quoting old prices to get the listing.  These vendors have been led astray.  They now have no buyer in sight and the trade of their sale and future purchase has been blocked.  Some agencies are still choosing to auction all listings regardless of whether that is the best scenario for that property.  Last month we saw one agency that had around 25 listings.  Two-thirds of these were failed auctions, many having been through two campaigns. Maybe it’s because they know of no other way…but that’s a story for another day!

Coming out of winter we do expect more activity with more listings with the prices remaining somewhat level.”

More good news for the real estate market is that last week Westpac economist, Bill Evans said interest rates could fall by 100 basis points in the next twelve months.  If passed on in full this would slash the current variable home loan rate from 7.8 to 6.8%.  This would provide some stimulus into the market place and ease the burden on those suffering from mortgage-stress.  Let’s hope the Reserve Bank is in alignment with Westpac and moves to lower interest rates before the end of the year.

 

The Rotunda, Balmoral Beach

Just one of the new wall prints we have hanging in our offices in Mosman.

The latest Nielsen poll shows Julia Gillard has plummeted to a new record low with Labor’s primary vote now at just 26%.  That’s the lowest recorded result for any major party in the history of polls.  Gillard is setting records for all the wrong reasons. However, she is still determined to push along with her increasingly unpopular tax on carbon despite it steering her party towards a very probable canning at the next election.

If Gillard is at all confused as to why her popularity is in freefall, she needs only to look at her hand in the following Top 10:

  • 1.              In 2007 inherited a budget surplus in excess of $60 billion, squandered it, and by 2011 had plunged the country into a deficit of $54.75 billion.
  • 2.              Spent $16 billion on a school halls building program in a rushed, ill-conceived and extravagant cash-splash.  Billions of dollars were wasted
  • 3.              Spent $2.5 billion on an insulation scheme that was linked to four deaths, hundreds of house fires and widespread rorting.  The scheme was then cancelled but the clean up from this disaster cost a further $400 million.
  • 4.              Tried to introduce a mining tax that was labelled by Tony Abbott as an act of economic vandalism.
  • 5.              After Australians raised and donated over $100 million for victims of the Queensland floods, Gillard rewarded our generosity with a new tax – a ‘flood levy
  • 6.              Cancelled John Howard’s ‘Pacific Solution’ and introduced a failed scheme that remains ineffective and costly today.  In 2007 under the Pacific Solution only 5 illegal boats entered our shores compared with 134 in 2010.
  • 7.              Forced an NBN on the nation at a cost of $43 billion and had taxpayers questioning the financial feasibility of such a scheme.

  • 8.              Shutdown a $600 million live-export industry but, capable of more back-flips than an Olympic gymnast, removed the ban some weeks later.  No guarantee or word that the temporary ban resulted in any improvement to the treatment of cattle exported to Indonesia.
  • 9.              Lied to the Australian people just one week before going to the polls stating, ‘there will be no carbon tax under the Government I lead’.
  • 10.           Increased the nation’s debt by a further $25 million with a series of glossy propaganda ads promoting her tax on carbon dioxide.

That’s not a great CV.  She needs a ‘time-out’ but not at this beach.

Balmoral Beach

 

Declines in some things are good things – interest rates is one of them.  But as for a prime minister and her Government being in freefall, well that is not good for the nation and only results in a growing and increasing lack of confidence.  How low can interest rates go?  Probably just 100 basis points in the next 12 months but how low can Gillard go?  A hell of a lot further.

 

Wrecks at Low-Tide

Going down, down, down to the bottom of the harbour.

Robert is currently reclining on a sun-lounge in Phuket.  It has been my pleasure to bring you VRN for this week.

Cheers

Andrew Blaxland

9 Responses to “How Low Can You Go?”

  • Bill says:

    “Robert is currently reclining on a sun-lounge in Phuket.” No doubt wondering how the hell he’s going to survive under a Gillard government 🙂

  • Ann says:

    Thanks Andrew,

    Impressive report, unimpressive Gillard CV though

    Have a good weekend.

  • Philip Hartman says:

    Andrew,

    I think I signed up for this blog because I am interested in buying another property in Mosman. I live in the suburb.

    I don’t understand why this relentless attack on our government… sure there are problems, but I have an issue with your assumption that everyone sees the world through your ideological framework. You are continually trying to make an ideological point.

    Not all of your customers are from the right. As a business person perhaps you should consider this.

    Why don’t you stick to real estate – which is perhaps the subject you are most qualified to commentate on.

    Thank you.

  • Agh – one has to love a blog! It achieves very little unless it challenges sentiment where all our subscribers have a voice.

    Bill – have been too busy enjoying the sunshine and cuisine to worry about the PM. When you record the lowest ever approval ratings it would be a safe bet that longevity in the office will be shorter rather than longer.

    For example: look at Labor NSW it is now an irrelevant party. The Opposition leader held a press conference to critique the Premier’s first 100 days in office and nobody attended.

    Philip – I’ve been writing this blog for eleven years and yes – it does get political. Maybe you should identify why, your left ideological beliefs prove our
    thoughts wrong?

    Just like the polls life is a debate. I guess when Newspoll figures are released next week you will think that the pollsters were dialing with their right finger too?

  • Peter says:

    Philip, good point as this blog lost its central purpose years ago. The writer’s weekly content is primarily political, not property, and the tiresome commenter Ann exemplifies the steady, low-quality discourse it generates.

  • Peter says:

    Why did you delete my comment which agreed with Philip Hartman, Robert? In a previous self-congratulatory blog entry, you wrote that in 10+ years of VRN you have deleted a comment on perhaps one occasion – there was nothing defamatory in my comment and you should have kept it posted. You are the caricature of a megalamaniac, albeit one in a very small fishbowl.

  • Ann says:

    Hi Philip

    If you look back over the 11 years, Robert has given it to any politician (left, centre and right) that deserves it. Its just at the moment he has a lot of ammunition, Federally.

    Same with the state and national newspapers. The ones the Federal Government are whinging about now, backed them at key stages in their history, eg Whitlam – Its Time, some of Hawkes initiatives, gave it to Howard over a lot of issues. They backed Kevin in 07.

    Its just there is too much low hanging fruit now.

  • Ron says:

    Ann, methinks you should be sharing a Phuket banana lounge intimately with Robert.

  • Hi Philip,
    I thought It was reasonably balanced… 7 paragraphs on property first, then finishing off with 3 paragraphs on Politics. (+ the top 10 list). This was my first attempt at this blog. I can assure you there will be a lot more relevant graphs and stats relating to property on Robert’s return. If you can get past the politics, (which always affect our markets), the information and insights into the local property market that Robert has provided weekly for over 10 years online is second to none. Hang in there and of course, feel free to call me regarding your property needs. I promise I will keep our discussion on property only.
    Cheers
    Andrew

Leave a Reply

Your email address will not be published. Required fields are marked *